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Welcome to The Hill’s Business & Economy newsletter
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Business & Economy
Business & Economy
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The Big Story
SALT cheat sheet: Key hurdle to Trump’s tax plan
Republicans’ tax-and-spending cut package faces a number of hurdles in its path to President Trump’s desk, but the state and local tax (SALT) deduction cap could be the steepest.
© Mattie Neretin
Tax writers on the House Ways and Means Committee have offered to raise the cap to $30,000 for joint filers making up to $400,000 a year. But suburban Republicans from higher-tax blue states have said that number isn’t going to cut it and are threatening to spike the entire bill if they don’t get the increase they want to see.
Here’s some of the lowdown on the key hurdle:
What is the SALT cap? SALT is a tax break that lets taxpayers deduct part of what they owe in state and local taxes from their federal tax return. Prior to 2017, the deduction was unlimited, but the tax reforms in that year capped it at up to $10,000.
Is there effective SALT relief in another part of the tax code? The Republican tax bill extends an increased cutoff for the alternative minimum tax (AMT) — another tax provision for wealthy taxpayers. The boosted AMT threshold is very expensive, costing more than $1.4 trillion through 2034. Altogether, the tax portion of the GOP bill is set to cost $3.8 trillion over the next decade, less than the $4.5 trillion limit that GOP tax writers had set for themselves.
The geopolitics of SALT — the ‘donor state’ and ‘taker state’ argument: SALT is such a touchy issue in part because it is a tax break that benefits wealthier taxpayers more, and Republicans in poorer parts of the country don’t think they should have to pay it. Nationwide, almost all people making more than $200,000 claim a SALT deduction, according to the National Association of Realtors. That’s fewer than 15 percent of U.S. households, according to census data. For people making less money, use of SALT falls off sharply.
Tobias Burns has more details here.
Welcome to The Hill’s Business & Economy newsletter, I’m Aris Folley — covering the intersection of Wall Street and Pennsylvania Avenue.
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Essential Reads
Key business and economic news with implications this week and beyond:
Democratic senator says he has recordings of favors ‘promised’ by Trump’s IRS pick
Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee, said Tuesday he has recordings of business associates of President Trump’s pick to lead the IRS, former Rep. Billy Long (R-Mo.), saying they expect to get favors from him once he is in office.
Kevin O’Leary on Trump, Walmart: Retailers aren’t going to ‘eat the tariffs’
“Shark Tank” investor Kevin O’Leary said in a Monday interview that retailers are not going to “eat the tariffs,” despite pressure from the Trump administration to do so.
Musk gets into tense exchange with anchor on DOGE
Elon Musk got into a tense exchange Tuesday with CNBC anchor David Faber after he pressed the Tesla CEO on his leadership of President Trump’s cost-cutting initiatives and the efficacy of the efforts.
Musk’s Tesla and SpaceX brand reputations tumble in new rankings
Tech billionaire Elon Musk saw the reputations of two of his companies, Tesla Motors and SpaceX, plummet, in a new survey conducted by Axios and Harris Poll.
Tax Watch
Trump pitch falls flat with GOP holdouts
President Trump’s forceful pitch for House GOP lawmakers to rally around the party’s “big, beautiful bill” fell flat Tuesday, as two groups of holdouts — hardline conservatives and moderate blue-state Republicans — are still demanding changes to win their support.
During a nearly two-hour meeting in the Capitol basement, Trump urged Republicans to support his agenda bill as Speaker Mike Johnson’s (R-La.) self-imposed Memorial Day deadline for passing the package inches closer.
The trouble was, he didn’t seem to change the minds he needed to.
“The president I don’t think convinced enough people that the bill is adequate the way it is,” said Rep. Andy Harris (R-Md.), the chair of the conservative House Freedom Caucus. Several members of the Freedom Caucus are among the loudest critics of the legislation.
“I can’t support it the way it is right now,” he added. “We’re still a long ways away.”
On spending cuts, the president urged lawmakers not to “f‑‑‑ with Medicaid,” as those on the right flank demand more muscular changes to the social safety net program.
— Mychael Schnell, Mike Lillis and Emily Brooks have more here.
Tax Watch is a regular feature focused on the fight over tax reform and extending the 2017 Trump tax cuts this year. Email a tip
COMING UP
The Hill’s Evening Report breaks down the day’s big political stories and looks ahead to tomorrow. Click here to sign up & get it in your inbox
The Ticker
Upcoming news themes and events we’re watching:
- The House Rules Committee is set to meet Wednesday at 1 a.m. ET on President Trump’s “One Big Beautiful Bill Act.”
In Other News
Branch out with more stories from the day:
US business owners are confused about Venezuelan employees with temporary status
DORAL, Fla. (AP) — As a business owner in the largest Venezuelan community in the United States, Wilmer …
The Hill Event
Health Safety Net Programs: Will Older Adults Fall Through?
Wednesday, May 21 at 8:30 a.m. EDT
Join The Hill to discuss how recent shifts in federal health policy are affecting older Americans. From proposed budget cuts to safety-net programs to bipartisan efforts like the EPIC Act, key decisions in Washington could reshape care and access for millions.
Speakers include:
- Alison Barkoff, Former Acting Assistant Secretary and Administrator of the Administration for Community Living, HHS
- Sue Koob, CEO, Preventive Cardiovascular Nurses Association (PCNA)
- Edwin Walker, Former Deputy Assistant Secretary for Aging, HHS and more.
Good to Know
Business and economic news we’ve flagged from other outlets:
- Dow slides more than 100 points, S&P 500 snaps six-day winning run (CNBC)
- Taiwan’s president downplays tariff tensions with the US as ‘frictions between friends’ (The Associated Press)
- Home Depot said it plans to keep most prices stable, but some products will disappear because of tariffs (CNN)
What Others are Reading
Top stories on The Hill right now:
Senate unanimously approves bill to eliminate tax on tips
The Senate on Tuesday passed a bill that would eliminate federal taxes on tips, advancing with the help of Democrats a top campaign promise of President Trump. Read more
Trump drops f-bomb, pressures Republicans to get in line behind his legislation
President Trump pressed House Republicans on Tuesday to fall in line behind a massive bill containing key pieces of his agenda in a rare trip to the Capitol. Read more
What People Think
Opinion related to business and economic issues submitted to The Hill:
- Congress should not pay for tax cuts by taxing charities
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